BMO Harris Shakes $564 Million Ponzi-Scheme Verdict on Appeal

BMO Harris Bank convinced a federal appeals court on Thursday to throw out a $564 million jury verdict against it for a predecessor’s role in a more than $3.5 billion Ponzi scheme orchestrated by disgraced former businessman Tom Petters.

The plaintiff in the lawsuit—the bankruptcy trustee for Petters’ defunct company, Petters Co. Inc.—was barred from recovery in tort because of the company’s complicity in Petters’ scheme under the doctrine of in pari delicto, the US Court of Appeals for the Eighth Circuit said in an opinion.

The court rejected the trustee’s argument that, under Minnesota law, the appointment ...